India Consumer & Retail
Off the Shelf
Key developments in Indian consumer space over the past month:
• New product launches. 1) HUL expanded its anti-ageing skin care
portfolio with the launch of two new brands - Ponds Gold Radiance (in
super premium segment) and Fair & Lovely Forever Glow (in mass
end). Prominent brands competing in this space include HUL’s Ponds
Age Miracle and P&G’s Olay Total Effects which are at the premium
end, 2) Dabur forays into modern OTC healthcare market with launch
of a new brand NUTRiGO (multi vitamin capsules), 3) Danone expands
dairy portfolio with yoghurt launch priced competitively with existing
brands (Nestle, Amul), 4) Coca-Cola and Nestle JV company - has
introduced ready-to-drink iced tea brand Nestea recently in bottled form
priced at Rs25/bottle, and 5) Emami expanded its skin care portfolio
with launch of Boroplus Healthy & Fair winter cream (fairness cream)
targeting the mass segment.
• Pricing Actions. Godrej Consumer has hiked prices for soaps (Godrej
No.1 and Cinthol) by 4%. This was being anticipated for quite some time
given significant cost push for palm oil.
• Global highlights. In the recent investor seminar, Unilever stated that it
aims to derive c70% of sales from emerging markets in coming years
from c50% currently. Growth drivers include: 1) Straddling the price
pyramid and focus on personal care; 2) Lead market development:
increasing consumer reach e.g. “starter packs”; 3) Low cost business
models and 4) Move with speed into the white spaces.
• Key commodity trends. There was sharp increase in the palm oil prices
over the past month, up 13% m/m, while crude oil was up 4%. Domestic
Sugar prices and wheat prices were both firm, up 6% m/m and 3% m/m
respectively.
• Performance and Valuation. Over the past month, BSE FMCG Index
was down 1%, outperforming Sensex by 1%. Nestle India and HUL were
the better performers, up 2% and 1% respectively.
Domestic Market – What’s changing?
Hindustan Unilever introduces premium anti-ageing skin care range - Ponds
Gold Radiance and mass anti-ageing skin cream Fair & Lovely Forever Glow
Hindustan Unilever launched the Ponds Gold Radiance range recently in the
premium segment. It will compete with Procter & Gamble, which is a leading player
in premium anti-ageing segment with its Olay Total Effects brand. HUL already has
presence in mid-premium anti-ageing segment with Ponds Age Miracle brand. Ponds
Gold Radiance is priced at Rs799 (for a 50gm pack) which implies a substantial
premium to Ponds Age Miracle priced at Rs300 (for a 50gm pack).
HUL has also introduced a new anti-ageing variant for Fair & Lovely called Forever
Glow to target the mid segment. This is priced at Rs59 for a 25gm pack at c50%
premium to regular FAL SKUs.
Skin care in India is the most sought after personal care category by both local and
global consumer majors given significant head room for growth (23% penetration,
growing at 20% p.a.) with an estimated size of Rs25bn. Rising consumer awareness
and interest, increasing income levels and favorable demographics (growing share of
working women) is driving growth for the category. In terms of key sub-categories of
skin care in India, fairness creams dominate the space with over 45% share followed
by moisturisers at about 22%.
Anti-aging solutions sub-segment is very nascent in India at just 3-5% of overall skin
care category but is fast finding acceptance among consumers. Anti-wrinkle creams
and hair colors started this trend of fighting age and this has now extended into a
wide range of anti aging products. Prominent brands competing in this space include
HUL’s Ponds Age Miracle and P&G’s Olay Total Effects which are at the premium
end. Consumers now prefer to prevent ageing rather than repair the damages at later
stage and high awareness levels coupled with increased availability of these products
is reducing the target age bracket for this segment.
Dabur forays into modern OTC healthcare market with the launch of a new
brand NUTRiGO
Dabur announced its entry into modern OTC healthcare market this week. Their
foray into the Vitamins, Minerals & Supplements category comes with the launch of
Dabur NUTRiGO – Daily Health Supplement with offerings for Men and Women.
This launch is part of Dabur’s aggressive plan to augment its leadership position in
the health care market in India, where the company currently operates with
traditional Ayurvedic products like Dabur Chyawanprash.
There are two variants – Dabur NUTRiGO Total for Men priced at Rs75 (for 10
capsules) and Rs195 (for 30 capsules), and Dabur NUTRiGO Woman priced at Rs85
(for 10 capsules) and Rs225 (for 30 capsules)
Godrej Consumer raises soap prices by 4%
Godrej Consumer has hiked prices for soaps (Godrej No.1 and Cinthol) by 4%. This
was being anticipated for quite some time given significant cost push seen for palm
oil derivatives.
For Godrej No.1 company has reduced the weight (from 120gm earlier to 115gm
now) without changing the price. For Cinthol brand they have taken the prices up by
4% (from Rs23 earlier to Rs24 for 100gm regular SKU).
Danone expands dairy portfolio with yoghurt launch
Danone Group has launched yoghurts recently, expanding its dairy portfolio in an
aggressive fashion both in general and modern trade. Yoghurts are available in plain
and flavored formats. Manufacturing for this product is handled by Schreiber
Dynamix Dairies. The regular plain yoghurt has been priced in line with the market
leaders - Amul and Nestle. However the flavored yoghurt is at a significant discount
to that of Nestle’s flavored yoghurt.
Coca-Cola, Nestle JV launches bottled ice tea Nestea
Coca-Cola and Nestle JV company - Beverage Partners Worldwide has introduced
ready-to-drink iced tea brand Nestea recently in bottled form. The product has been
initially rolled out in Mumbai and would be gradually launched pan-India. It is priced
at Rs25 (for a 400ml PET bottle) broadly in line with regular fruit based drinks.
Nestea is already present in India as an instant mix which is marketed by Nestle
India.
Emami expands its skin care portfolio
With the onset of winter, Emami has introduced Boroplus Healthy & Fair winter
cream (fairness cream). This product targets the mass/mid price segment at Rs27 for
a 25gm pack. As seen in case of Emami's other brands, company has roped in a
leading film personality to endorse the brand and has aggressively started to advertise
this on mass media.
Hindustan Unilever had also introduced a winter specific fairness cream Fair &
Lovely Winter Fairness Cream last year.
